Open Interest Soars…Cardano Signals Preparation for Ascent

▲ Cardano (ADA)/ChatGPT generated image ©

Amidst Cardano's sideways movement without clear direction, subtle buying signals detected in the derivatives market are stimulating the possibility of a rebound.

According to investment media FXStreet on May 4 (local time), Cardano (ADA) showed a slight upward trend in the early $0.25 range, taking a breather after last week's correction. On-chain indicators are neutral, but a limited bullish trend is being detected in the derivatives market.

According to CoinGlass, Cardano's open interest (OI) increased to $465.52 million, a steady expansion from $433.60 million last Friday. This signifies an influx of new funds and increased market participation, interpreted as a signal suggesting short-term upward potential.

Funding rates have also turned positive. The OI-weighted funding rate entered positive territory at 0.0072%, forming a structure where long positions pay short positions. This indicates that investors are betting on an upward movement.

Technically, downward pressure appears to be easing. Cardano currently remains below the 50-day exponential moving average of $0.255, maintaining a short-term bearish structure, but its Relative Strength Index (RSI) has risen to 54, above the neutral line, slowing down bearish momentum. The Moving Average Convergence Divergence (MACD) also shows a slight positive trend, suggesting limited attempts at an upward move.

Upper resistance levels are formed in the $0.255, $0.269, and $0.286 ranges, with strong resistance awaiting near $0.299. Conversely, at the bottom, $0.243 acts as a key support level, and a break below it could lead to a further downward phase.

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